Steven Greenhut: California a model for other states?

SACRAMENTO – California's modern-day progressive Democrats keep crowing about the huge success they've had in taming the state's budget deficit, thanks to Proposition 30's tax increases and other "reforms," and now are championing the Jerry Brown model as a blueprint for the nation.

Is that realistic?

It's one thing that other states have to deal with our former residents who opted to relocate rather than accept California's tax and regulatory regimen, but now, apparently, they are going to have to deal with the state's policies, promoted by California's liberal politicians.

Not surprisingly, the national media have been quick to tout California's Democratic-led "renaissance." For instance, The New Republic this week published a feature, "Back from the Brink," about California progressives having "achieved the impossible" of a balanced budget.

"Progressive Democratic activists identified the straitjacket of rules that had the state tied up in knots, and devised a systematic plan to change them," the magazine's David Dayen posited. "Through massive organizing, they transformed the electorate and sidelined Republican obstructionists. Now, with surplus money on hand, they're getting ready to fight a new battle over the next few years: whether to focus on budget balancing and debt reduction, or to continue to boldly invest in California's future.

I chuckled at the "debt reduction" reference. How often do progressive Democrats keep a lid on spending or care about paring the size of pension debt? They, indeed, will "invest" in California – and you know what investing means. They will throw money at programs and at government employees without improving accountability or insisting on reform.

Yes, the article is right that California's Democratic leaders did systematically dismantle many of the taxpayer protections that stood in their way, thanks to Brown's political skills and seemingly endless union campaign cash. But that's a political victory, not a fiscal blueprint.

Brown and his allies killed the Legislature's two-thirds budget-approval requirement, turning Republicans, already in the minority, into an irrelevancy. Because of previous supermajority rules, the GOP could tie up budgets, forcing Democrats to look at the kind of budget cuts and fiscal restraints they try to avoid.

No more. Now, GOP lawmakers aren't even included in the budget process. Now the Democratic legislative supermajorities can raise taxes whenever they choose. Maybe a moderate Democratic caucus will emerge, but even so-called moderates have always been willing to raise taxes.

The Democrats likewise moved statewide initiative votes to general elections, rather than primaries, thus ensuring greater Democratic turnout to support the two big tax increases on last November's ballot. There was also redistricting and a Louisiana-style jungle primary that – with the support of some good-government Republicans – seems to have further eroded what little power the minority party already had.

The New Republic piece points to Democratic success at changing voting laws, allowing people to register online. That, along with the vast networking of grass-roots and union organizing efforts, resulted in a massive wave of Democratic voters that gave Democrats new congressional seats and two-thirds majorities in both houses of the Legislature.

Yes, Democrats mustered the powerful interest groups that support them and then rewrote the rules to gain more power in a state where the GOP already is on life support. Democratic activists can try to replicate this elsewhere, and I would advise other states against replicating the strategy.

The Democratic budget blueprint remains the same: Keep raising taxes.

Dayen argued that Democrats still need to take on Prop. 13 (1978's historic property-tax limitation) and eliminate it for commercial property owners. He also called for raising other corporate taxes and imposing a tax on oil production. Never mind that these tax hikes could weaken the real estate and oil-exploration rebounds that are crucial to the optimistic economic projections that helped balance the budget.

Old-style progressives a century ago gave California the referendum and initiative so the people could keep in check powerful interests. Modern-day progressives are chipping away at that process so no one can challenge public-sector unions.

The progressives' success means reform-fighting unions for teachers, prison guards and other employees can protect their unsustainable pensions and fight reforms that could possibly improve the shoddy public services that many on the left care about. Also unaddressed by this new blueprint is the "wall of debt" the state government and municipalities are galloping toward.

Despite the governor's nod to holding the line on spending, this new political dynamic is dependent on the things progressives have been unwilling to do: control their appetite for increasing the size of government, limit the demands of labor unions and restrict their desire to tax businesses into oblivion (or, to Nevada). Think, for example, about the governor's high-speed-rail plan.

Instead of pulling California back from the brink, the most-recent election may wind up sending the state in the other direction. I do agree with Brown and the New Republic that other states ought to pay attention to what's happening here. And their response should be to fight it.

Steven Greenhut is vice president of journalism at the Franklin Center for Government and Public Integrity. Write to him at steven.greenhut@franklincenterhq.org.